KPT awards dredging contract to Dutch firm

KPT awards dredging contract to Dutch firm KARACHI: The Karachi Port Trust (KPT) has finally awarded the capital dredging contract to a foreign company for the approach channel of Pakistan Deep Water Container Terminal (PDWCT) at a cost of Rs2.985 billion last Friday, official sources disclosed on Thursday.

After receiving four tender bids, KPT in December 2015 opened technical part of the bids but deferred the opening of financial bids. For the evaluation of technical bids, KPT set up an in-house technical committee which qualified two bidders.

In order to move forward, KPT asked the two qualifying bidders to extend the validity of bid security bonds as financial tender of the bids were not opened so far. However, only one of the bidders obliged while the other refused.

As a result of this development, only one financial bid of the lowest bidder from a Dutch company — ‘Van Oord Dredging and Marine Contractor BV’ — remained valid, sources said.

Thereafter, the KPT on June 30, 2016 opened the lone financial bid before the expiry of validation period.

The Dutch dredging company, besides, submitting main a bid with a dredging cost of Rs6.293bn (Rs1,258 per cubic meter), also offered an alternate bid.

According to private and independent engineers’ estimates, the current cost of dredging for removal of 5 million cubic meters would come to around Rs5.437bn or Rs1,087 per cubic meter, official sources said.

If this is true, port and shipping experts said, then KPT would save a huge amount of around Rs2.452bn by awarding the dredging contract to Van Oord Dredging Company as they are charging Rs2.985bn against the engineers estimated cost of Rs5.437bn.

The KPT also refused the demand put down in the process of negotiations with the Dutch company for allowing them to alter terms and conditions for payment of dredging cost.

KPT faces criticism: Despite saving a huge amount of Rs2.452bn in dredging contract, the KPT has come under strong criticism.

The foremost objection raised by some experts and independent evaluators is that KPT did not follow due process in awarding the bid, particularly when there was single bid. However, KPT official argued that Public Procurement Regulatory Authority (PPRA) rules do allow acceptance of single bid and also quoted a number incidents where single bids were accepted.

The KPT sources told Dawn that after the Board of Trustees approval to the dredging contract a letter of acceptance has been issued on Oct 3, 2016 with a condition that work would be completed in 120 days. On the next day (Oct 4, 2016), the Dutch dredging company also gave its consent letter.